Vendasta Blog

What is a Cloud Broker? (And the Death of B2B Industry)

When you hear “cloud broker,” a few things might come to mind... A person/firm that sells shares in cloud companies? Or maybe some hipster selling condensed water vapor in a bottle...?

No, a cloud broker is MUCH more than that. The cloud broker is the reckoning call in the B2B landscape.

What is a Cloud Broker?

A cloud broker is any B2B organization that provides multiple cloud products/services to their business clients.

Ergo, a cloud broker either internally develops multiple cloud-based solutions to be bundled and sold to their business clients, or else they simply resell existing cloud solutions on the market.

What Industries do Cloud Brokers Belong to?

That’s a bit of a trick question. Cloud brokers transcend traditional industry boundaries. A cloud broker can arise from what was founded as a marketing agency, what was a telecommunications company, what was a tech company, what was a newspaper company, what was an IT company, etc.

If you have a selling relationship with other businesses, then you are already halfway to becoming a cloud broker. The second half of the equation is as mentioned above; either developing necessary cloud technologies to sell, or by forming a vendor relationship with existing cloud entities.

Comporium Example:

AT&T competes with Verizon. The Wall Street Journal competes with USA Today. Or at least that’s how it used to be. Today, AT&T offers phone, internet, and TV to business clients. But other telecommunication companies have gone further. For example, Charlotte based Comporium offers their clients everything mentioned above plus security solutions, digital signage, cloud-based data storage, and a large suite of cloud-based digital marketing solutions.

Comporium’s customers can skip their stop at the cable company, the security company, the marketing agency, and the traditional media company. Comporium has now stolen potential clients from the Wall Street Journal. Comporium now has stronger relationships with their clients than any of their competitors. That’s the power of the cloud broker.

What is the Opportunity in Becoming a Cloud Broker?

It’s the era of SaaS. With every passing year, SMBs (small-medium businesses) and enterprises continue to increase SaaS spend. In fact, according to the Google Accel Report, the combined SaaS spend is forecasted to hit 132 billion dollars by the dawn of 2020. This is the window for B2B businesses that evolve into cloud brokers.

It’s key to note that SMB SaaS spend is growing at 3x the velocity of those enterprise peers. This is because these businesses are gearing up for war with the big brands and recognize the need for tech as a means to keep pace.

The problem: ISVWorld estimates that there are 71,000 SaaS solutions available to local businesses. These solutions span a spectrum of industries that includes everything from sales, to engineering, to finance.

These local businesses cannot easily differentiate solutions and don’t have the time to be managing payment to 15 different solution providers for 21 different products.

Local business desires are simple:

More solutions, fewer providers

Simplified payment, reduced costs

Guidance

Yet, these basic needs have gone unmet for years. This is driving local businesses to abandon their individual B2B providers and partner with an organization that can meet all of their needs. In fact, AppDirect’s Cloud Services Adoption Report suggests that 51% of SMBs already have.

The solution: A single service provider; a cloud broker.

According to the 100,000 SMBs in our Churn Study, selling a single product to an SMB will prove a retention rate of only 30% over a 2 year span. Selling that SMB just 1 more product showed a 20% increase in retention rate, while selling an SMB 4 products shows a retention rate of 80%. This demonstrates the leverage of the cloud broker, and the trust that is created with the client.

Conclusion

It’s simple. The industry walls of the B2B landscape are coming crashing down. What if a single company stole business from marketing agencies, security companies, and telecommunication companies in one fell swoop? What if the Wall Street Journal had to square off against AT&T and ADT Security Services? This is the future of B2B.

About The Author

Brock is a Marketing Analyst at Vendasta with a passion for the more creative things in life. He also answers to Archie - for obvious reasons... And when he's not putting his fingers in paint, or saving Riverdale, he can usually be found asking Google one of the many more embarrassing "how to" questions.